How Disclosure Schedules Benefit Mergers and Acquisitions
There’s a lot that goes into orchestrating a successful deal when it comes to mergers and acquisitions, but the actual disclosure schedule may be among the most important. Here’s a closer look at what a disclosure schedule is really all about, as well as why it’s such an important part of an M&A transaction.
What Is a Disclosure Schedule and Why Is It Important?
An M&A disclosure schedule is pretty much exactly what it sounds like. It’s a listing that consists of any and all important information required to complete or progress the transaction at any point. Examples of facts and data that might be included on a typical schedule include information on any intellectual property involved, names or personal information associated with employees, and important exceptions to any stipulations involved.
Mergers and acquisitions that come attached to organized, complete disclosure schedules result in clean, airtight transactions that go smoothly. However, a schedule that isn’t drafted well, is unclear, or is left incomplete in any way can lead to serious liability for either or both of the entities involved. In some cases, botched disclosure listings can prevent a deal from going through at all.
Preparing a Beneficial Disclosure Schedule
Although there are occasional exceptions, the responsibility of assembling the disclosure schedule in the first place usually falls to the entity on the selling end of the equation. Outside legal experts that specialize in mergers and acquisitions are usually brought in to make sure everything goes smoothly and stays organized throughout every step of the process.
Before the schedule in question is considered ready to go, it will likely go through many revisions, tweaks, and adjustment, so it’s important to make sure its creation is begun early on in the process. Rushing is among the most common reasons for a schedule that isn’t up to snuff in one way or another. It’s also important to make sure each draft is properly circulated to all parties that need to be kept in the loop throughout the process.
The more detailed and complete the disclosure schedule, the higher the likelihood of a deal that goes through in a timely manner and is completed to the full satisfaction of all involved. Enlisting the help of the right legal team and accountants is a must to make sure everything’s well accounted for and clear. How does your company make sure M&A transactions are completed to the satisfaction of all involved?